Met Life v. Commonwealth, 1st Cir. (1998)
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Transcript of Met Life v. Commonwealth, 1st Cir. (1998)
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USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 97-1321
IN THE MATTER OF: THE COMPLAINT OF
METLIFE CAPITAL CORP., ETC.,
Plaintiff - Appellant,
____________________
COMMONWEALTH OF PUERTO RICO, ET AL.,
Plaintiffs - Appellees,
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v.
M/V EMILY S., ETC., ET AL.,
Defendants - Appellees.
____________________
No. 97-1322
IN THE MATTER OF: BUNKER GROUP, INC., ET AL.,
Plaintiffs - Appellants,
____________________
COMMONWEALTH OF PUERTO RICO, ET AL.,
Plaintiffs - Appellees,
v.
M/V EMILY S., ETC., ET AL.,
Defendants - Appellees.
____________________
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen Consuelo Cerezo, U.S. District Judge] ___________________
____________________
Before
Torruella, Chief Judge, ___________
Lynch, Circuit Judge, _____________
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and Keeton,* District Judge. ______________
_____________________
Michael Mirande, with whom Robert F. Bakemeier, Bogl________________ _____________________ ___
Gates P.L.L.C., Jos E. Alfaro-Delgado and Calvesbert, Alfa______________ _______________________ ________________
L pez-Conway were on brief for appellant Metlife Cap ____________
Corporation.
John M. Woods, with whom Andrew J. Garger, Thacher Prof _____________ ________________ ___________
& Wood, William A. Graffam, Patricia A. Garrity and Ji______ ___________________ ____________________ __
Graffam & Lausell were on brief for appellant Bunker Group, I _________________
Mee Lon Lam, Trial Attorney, Torts Branch, Civil Divis ___________
U.S. Department of Justice, with whom Frank W. Hunger, Assis _______________
Attorney General, Civil Division, and Guillermo Gil, Un
______________
States Attorney, were on brief for appellee United State
America.
Antonio J. Rodr guez, with whom Rice Fowler, Jos______________________ ____________ ___
Fuentes-Agostini, Attorney General, Commonwealth of Puerto
________________
John F. Nevares and Smith & Nevares were on brief for appe ________________ ________________
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Commonwealth of Puerto Rico.
____________________
December 24, 1997
____________________
____________________
* Of the District of Massachusetts, sitting by designation.
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TORRUELLA, Chief Judge. These two acti TORRUELLA, Chief Judge. _____________
consolidated for appeal, challenge the district court's ru
that the Oil Pollution Act of 1990 ("OPA"), 33 U.S.C. 2701
repealed the Limitation of Shipowner's Liability Act of
("Limitation Act"), 46 U.S.C. app. 181-96, as to oil s
claims for removal costs and damages arising under the OPA.
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hold that claims arising under the OPA (for pollution re
costs and damages) are not subject to the substantive
procedural law of the Limitation Act or to the concursus
claims under Rule F of the Supplemental Rules for Cer
Admiralty and Maritime Claims of the Federal Rules of C
Procedure ("Rule F").
I. BACKGROUND I. BACKGROUND
On January 7, 1994, the towing wire between the tu
EMILY S and the barge MORRIS J. BERMAN parted, groundin
barge off of Punta Escambr n, San Juan, Puerto Rico.
grounding caused much of the MORRIS J. BERMAN's cargo of fuel
to spill into the waters of the Commonwealth of Puerto Rico
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"Commonwealth"). Soon after the spill, the Commonwealth fil
damages action in the United States District Court for
District of Puerto Rico naming numerous defendants including:
the demise charterer of the EMILY S Bunker Group, Inc. ("B
(ii) the operator of the EMILY S Bunker Group Puerto Rico,
("BGPR"); (iii) the owner and operator of the MORRIS J. BE
and the co-demise charterer of the EMILY S New England Ma
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Services ("NEMS"); (iv) the owner of the EMILY S MetLife Cap
Corporation ("MetLife"); and (v) the EMILY S in rem.__ ___
Commonwealth arrested the EMILY S and sought damages under
OPA, general federal maritime law, and Puerto Rico
Subsequently, several other civil actions were filed in
District of Puerto Rico by private parties seeking recovery u
a variety of theories for damages. Each of these actions
either consolidated with the Commonwealth's action or dismiss
Within six months of the oil spill, the appell
NEMS, BGI, and BGPR (collectively, the "Bunker Group") fil
complaint under the Limitation Act and Rule F, see
exoneration from or limitation of liability. At the same t
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the appellant MetLife, as owner of the EMILY S, filed a sepa
action under the Limitation Act. On August 25, 1994,
district court issued a notice to claimants of the limita
actions and an order of injunction, or monition, enjoinin
commencement of any actions against the limitation plaintiffs
claims arising out of the grounding of the barge except
actions filed in the limitation proceeding. The monition cre
a concursus of all claims in a single consolidated procee
NEMS, BGI, BGPR, and MetLife (the "Limitation Plaintif
provided notice to actual claimants as well as to poten
claimants in a Notice of Monition in the newspaper El Nuevo________
on August 26, 1994, directing them to file their claims o
before October 15, 1994.
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At the conclusion of the monition period,
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Limitation Plaintiffs filed motions for entry of default aga
all persons who failed to file. Subsequently, nume
claimants, including the Commonwealth and the United States
"Government"), filed actions in the limitation proceedi
seeking recovery of damages under the OPA, general maritime
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and other law. In their claims, both the Commonwealth and
Government asserted that their OPA claims should not be sub
to concursus.
Three other claimants, Hilton International of Pu
Rico, Inc., Puerto Rico Tourism Company, and Hotel Develop
Corporation (collectively, the "Hilton claimants"), filed cl
under seal in the limitation proceedings while t
administrative claims, which had already been filed with
National Pollution Funds Center ("NPFC"), were pending.
Hilton claimants simultaneously moved the district court
relief in order to preserve their OPA claims if they wit
them from the concursus. On June 28, 1996, the district c
issued an order suspending the August 25, 1994 order
injunction issued in the limitation proceedings. This o
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allows "any claims for oil spill removal costs or da
resulting from or in any way connected with the grounding of
barge MORRIS J. BERMAN on January 7, 1994 to be asse
independently of the limitation of liability proceedin
Subsequent to the issuance of the order, the Hilton clai
withdrew their limitation claims in order to proceed with t
administrative claims before the NPFC. However, their mot
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served as the vehicle for all parties to brief the question
presented to this court. On August 7, 1996, the appellants
BGI, BGPR, and MetLife timely filed this appeal of the June
1996 order.
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II. DISCUSSION II. DISCUSSION
Interpretations of federal statutes and rules
subject to de novo review. See Strickland v. Commissioner,__ ____ ___ __________ ____________
Dept. of Human Servs., 96 F.3d 542, 545 (1st Cir. 1996). _____________________
A. The Limitation Act and the OPA A. The Limitation Act and the OPA
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The Limitation Act was enacted in 1851 to pro
shipbuilding and to induce investment in the growing Amer
shipping industry. See Hartford Accident & Indem. Co.___ ________________________________
Southern Pac. Co., 273 U.S. 207 (1927). The law permits__________________
shipowner to limit his or her liability as to certain claims
damages arising out of the voyage of his or her vessel to
post-accident value of the vessel plus pending freight. Se_
U.S.C. 183, 186.
Rule F governs the filing and adjudication o
limitation action. The vessel owner must file a complain
later than six months after receipt of a claim as wel
depositing the amount of the limitation fund with the court.
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Rule F(1). Rule F concursus, once referred to as the "heart
a limitation action, Maryland Cas. Co. v. Cushing, 347 U.S.__________________ _______
417 (1954), requires multiple claimants to pursue relief i
single forum and marshals the assets of a limited fund. See___
F(3), F(7). Concursus is intended to provide a "prompt
economical disposition to controversies." Cushing, 347 U.S_______
415. Today, many question the continued usefulness and vita
of the Limitation Act. See, e.g., 2 Thomas J. Schoenb ___ ____
Admiralty and Maritime Law (2d ed. 1994) (the Limitation___________________________
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"original purpose . . . seems to have lost much of its force
the availability of insurance, bills of lading statutes that
substantial limits on liability for cargo loss, and the abi
to limit claims by contract"). However, Congress has n
repealed the act, and therefore, courts continue to apply
See, e.g., Keller v. Jennette, 940 F. Supp. 35 (D. Mass. 1996 ___ ____ ______ ________
The Oil Pollution Act was passed in the wake of
1989 Exxon Valdez tanker disaster and created a
comprehensive compensation and liability scheme for oil s
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pollution than had existed under earlier legislation. Prio
the OPA, the Federal Water Pollution Control Act ("FWP
(commonly known as the Clean Water Act), 33 U.S.C. 1251-1
provided liability limitations for federal pollution re
costs associated with oil spills. See id. 1321(c). The___ __
imposes strict liability for pollution removal costs and da
on the "responsible party" for a vessel or a facility from
oil is discharged. See 33 U.S.C. 2702(a). Responsible par ___
include owners, operators, or demise charterers of a vessel.
id. 2701(32). __
The OPA limits the liability of responsible par
based upon the type of vessel and its tonnage. For tank vess
the limit can be as high as $10 million. Id. 2704(a)(1).__
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all other vessels, the limit is the greater of $600 per gross
or $500,000. Id. 2704(a)(2). Responsible parties may
__
unlimited liability for, inter alia, acts of gross negligenc_____ ____
willful misconduct. In addition, state law applies free of t
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liability limits. See id. 2718(a), 2718(b). Finally, the___ __
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consolidated previously established oil pollution funds into
Oil Spill Liability Trust Fund (the "Fund"), which pays cl
brought under the OPA after they have first been presented to
responsible party, if the responsible party is entitled t
defense, or the liability limit under the statute has
reached. See 33 U.S.C. 2708(a), 2713(b)(1)(B). See gener ___ ___ ____
Schoenbaum, supra, at 384. _____
B. The OPA's Impact on the Limitation Act B. The OPA's Impact on the Limitation Act
The OPA specifically addresses its relationship
the Limitation Act and other legislation when it states:
Notwithstanding any other provision or _________________________________________
rule of law, and subject to the
______________
provisions of this chapter, each
responsible party for a vessel or a
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facility from which oil is discharged, or
which poses the substantial threat of a
discharge of oil, . . . is liable for the
removal costs and damages specified in
subsection (b) that result from such
incident.
33 U.S.C. 2702(a) (emphasis added). Appellant MetLife ass
that this provision imposes the OPA's increased liability li
notwithstanding any previously applicable limitations under___________
Limitation Act, but does not eviscerate preexisting limita
procedure under the Limitation Act. Thus, the appellant ar _________
Limitation Act concursus remains available to respons
parties.
However, a plain reading of the subsection sug
that the OPA repealed the Limitation Act with respect to re
cost and damages claims against responsible parties. See I
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___
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JAHRE SPRAY II K/S, 1996 WL 451315, *4 (D.N.J. 1996); accor__________________ ____
re Odin Marine Corp., No. 96-5438, slip op. at 6 (S.D.N.Y._____________________
7, 1997); Tug Capt. Fred Bouchard Corp. v. M/V BALSA 37, No._____________________________ ____________
1321, slip op. at 2 (M.D. Fla. Oct. 22, 1996). Accordingly,
procedural rules incorporated into the Limitation Act
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inapplicable as well to such claims. In interpreting si
language in the FWPCA, courts have held that the statu
"notwithstanding" phrase precludes application of the Limita
Act to claims by the United States for FWPCA pollution re
costs. See In re Oswego Barge Corp., 664 F.2d 327, 340 (2d
___ ________________________
1981); In re Hokkaido Fisheries Co., Ltd., 506 F. Supp. 631,__________________________________
(D. Alaska 1981). See also Schoenbaum, supra, at 376 ( _________ __________ _____
broadly supersedes the Limitation of Liability Act with res
to damages and removal costs under both federal and state
including common law"). We find these cases to be persua
because "[n]either the language of OPA nor its legisla
history suggests that OPA's provisions should be const
contrary to the settled law applicable to FWPCA when OP
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enacted." William M. Duncan, The Oil Pollution Act of 19
Effect on the Shipowner's Limitation of Liability Act, 5 U.
L. Rev. 303, 316 (1993).
In addition to the "notwithstanding" clause, at l
four other provisions in the statute explicitly repeal
Limitation Act with respect to certain types of claims. Se_
U.S.C. 2702(d)(1)(A) (repealing the Limitation Act as to t
parties solely responsible for a spill); 2718(a) (repealin
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Limitation Act as to state and local statutory remedi
2718(c)(1) (repealing the Limitation Act as to additi
liability imposed by the United States, any state, or polit
subdivision); 2718(c)(2) (repealing the Limitation Act a
fines or penalties). The appellants contend that, outsi
these specific instances, the Limitation Act continues to a
to the OPA. The Bunker Group, citing one commentator, notes
"[i]f Congress' intent in enacting OPA had been to comple
repeal the Limitation Act, it would not have painstaki
repealed it only with respect to certain types of actio
Duncan, supra, at 319. _____
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When we consider these five OPA provisions
explicitly repeal the Limitation Act as well as others that
irreconcilably in conflict, see infra, we find that the OP___ _____
repealed the Limitation Act as to oil spill pollution cl
arising under the OPA in the instant case. "'[W]here provis
in the two acts are in irreconcilable conflict, the later act
the extent of the conflict constitutes an implied repeal of
earlier one . . . .'" See Radzanower v. Touche Ross & Co.,___ __________ __________________
U.S. 148, 154 (1976) (quoting Posadas v. National City Bank,_______ __________________
U.S. 497, 503 (1936) (noting standard for repeal
implication)).
While the repeal of statutes by implication
disfavored, see Tennessee Valley Auth. v. Hill, 437 U.S. 153,
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___ ______________________ ____
(1978), several key provisions of the two statutes are pla
inconsistent. First, the Limitation Act limits the shipown
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liability to the post-accident value of the vessel plus pen
freight, 46 U.S.C. 183, while the OPA contemplates a st
liability regime with statutory limits of at least $2 million
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tanks vessels and $.5 million for all other vessels. 33 U.
2702, 2704. Moreover, in certain instances, the OPA imp
virtually unlimited liability on the responsible party. Se_
U.S.C. 2704(c). Second, the provisions on jurisdiction ar
obvious tension. Only federal courts have jurisdiction
limitation proceedings. See, e.g., Complaint of Dammer___ ____ ____________________
Vanderheide & Scheepvaart Maats Christina B.V., 836 F.2d 750,______________________________________________
(2d Cir. 1988). In contrast, the OPA grants federal and s ____
courts jurisdiction to decide oil pollution cases. 33 U.
2717(b), 2717(c). Finally, the provisions of Rule F,
procedural rule that implements and which is incorporated
the Limitation Act, cannot be reconciled with sections of
OPA. See Part C, infra. ___ _____
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Even assuming arguendo that the language is ambigu ________
the legislative history is consistent with our interpretat
As this court has noted, the "chief objective of statu
interpretation is to give effect to legislative wi
Passamaquoddy Tribe v. State of Me., 75 F.3d 784 (1st Cir. 19 ___________________ ____________
In considering the OPA's liability provision, Congress state
Liability under this Act is established
notwithstanding any other provision or
rule of the law. This means that the
liability provisions of this Act would
govern limitations compensation for
removal costs and damages notwithstanding
any limitations under existing statutes
such as the act of March 3, 1851 . . . .
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H.R. Conf. Rep. No. 101-653, at 103 (1990), reprinted in_____________
U.S.C.C.A.N. 779, 781 (Joint Explanatory Statement of
Conference Committee explaining 2702(a)). Furthermore,
Senate Report on the OPA bill asserts that the OPA "comple
supersedes the 1851 statute with respect to oil polluti
S. Rep. No. 101-94,at 14, reprinted in 1990U.S.C.C.A.N. 722,____________
More generally, as the Ninth Circuit reasone
finding an implicit repeal of the Limitation Act by the liabi
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provisions of the Trans-Alaska Pipeline Authorization Act,
U.S.C. 1651-1655, "[a]pplication of the Limitation Act to
OPA] would frustrate completely [the OPA]'s comprehen
remedial nature." See In re Glacier Bay, 944 F.2d 577, 583___ __________________
Cir. 1991). "The purpose of OPA, as well as other reme
legislation passed by Congress and the states to ad
environmental disasters such as oil spills, was to encou
rapid private party responses." JAHRE SPRAY, 1996 WL 451315___________
*4. However, the Limitation Act "allows vessel owners virtu
to eliminate liability for catastrophic damages." Glacier_______
944 F.2d at 583. Hence, the OPA's scheme is in irreconcil
conflict with the Limitation Act.
Some claims arising from an incident in whic
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pollution occurs do not escape the Limitation Act. For exa
that Act remains in force for general maritime claims suc
maritime tort actions for harms to persons or vessels. Se_
U.S.C. 2751(e) ("[e]xcept as otherwise provided in
chapter, this chapter does not affect . . . admiralty
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maritime law"). The district court below, in keeping wit
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OPA's savings provision in 2751(e), reserved the Limita
Plaintiffs' right "to seek limitation of liability for t
claims subject to reduction under the Limitation
Therefore, the Bunker Group's contention that the dist
court's order exempts from Rule F concursus all claims ari
from the grounding, whether or not they arise under the OP
without merit. The appellants remain free to avail themselve
the Limitation Act and Rule F concursus for their non-OPA cla
C. The Independent Application of Rule F Concursus C. The Independent Application of Rule F Concursus
The appellants claim that even if the OPA supers
the Limitation Act, because the OPA fails to provide any gui
on the procedure necessary to implement it, Rule F concu
applies to actions under the OPA independently of the Limita
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Act. To support their contention, the appellants note that
F is framed generally to address "limitation of liabi
pursuant to statute." Rule F(1). Rule F was originally wri _______
by the Supreme Court to implement the 1851 Limitation Act.
redrafting the rules, the Supreme Court substituted a di
reference to the 1851 statute in Rule F with the "pursuant
statute" language, which we find reveals a more general pur
for Rule F.
We conclude, however, that Rule F's requirements
venue and limitation of liability cannot be reconciled wit
OPA's provisions regarding oil spill damages. Under Rule
limitation of liability proceeding may be commenced only in
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district where the vessel has been seized, or if the vessel
not been seized, in any district in which the owner has
sued. See Rule F(9). If neither the vessel has been seize___
action commenced against the owner, the limitation action ma
filed in the district where the vessel may be. See id. Venu___ __
proper in any district only if there is no pending litigation
the vessel is not within any district. See id. Under the
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___ __
in contrast, venue is proper in any district in which
discharge of oil or injury or damages occurred, or in whic
defendant resides, may be found, has its principal office, or
appointed an agent for service of process. 33 U.S.C. 2717
Thus, the OPA offers claimants a much broader choice of fo
while Rule F's venue requirements are significantly
restrictive.
Rule F's deadline for claims is also inconsistent
the OPA's statute of limitation. Once a limitation actio
commenced, the court issues a notice to claimants requiring
to file their claims by the date fixed in the notice. See___
F(4). The court may fix a date that requires claims to be f
in as little as 30 days after issuance of the notice. Id.
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__
the instant case, the monition period terminated approxima
ten months after the date of the MORRIS J. BERMAN's groun
The OPA, however, allows claimants three years to commenc
action to recover removal costs and damages. See 33 U.S.C___
2717(f)(1), 2717(f)(2). In addition, if the claimant decide
seek recovery from the Fund, the claimant has six years
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present removal costs claims, see 33 U.S.C. 2712(h)(1),___
three years to present damage claims. See id. 2712(h) ___ __
Finally, section 2717(f)(4) extends the limitation period
subrogation actions by three years from the date the Fund pa
subrogated claim. See 33 U.S.C. 2717(f)(4). ___
One concern we have with the shortened claims pe
under Rule F is that it would interfere with the United Sta
subrogation rights under the OPA. If oil spill claims
subject to Rule F concursus, claimants who are barred by
court imposed deadline from recovering against the respons
party, are likely to present their claims to the Fund. Once
Fund pays a claim, the United States acquires all rights
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subrogation. See 33 U.S.C. 2712(f), 2713, 2715(a). Howe ___
at that point, the United States may then be denied access to
proceedings against the responsible party, and consequently,
Fund will bear the financial burden of these late claims.
The appellants respond that, under Rule F,
government's subrogation rights do not necessarily lapse bec
"[f]or cause shown, the court may enlarge the time within
claims may be filed." Rule F(4). We believe though
subjecting the government's subrogation rights to the discre
of the trial court in every oil spill action fails to adequa
secure those rights. Congress specifically examined this i
in creating the OPA's statute of limitation and giving the co
discretion over this matter is contrary to legislative int
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Moreover, even if the courts consistently enlarge the moni
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period for subrogation claims, in many instances, the li
fund established by the concursus procedure will already
been exhausted.
Finally, contrary to the appellants' contention
the OPA fails to provide any procedural guidance, the OPA___
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establish a claims procedure. The OPA requires all claims
removal costs or damages to be presented first to the respons
party or guarantor. See 33 U.S.C. 2713(a). If the respons ___
party denies liability or the claim is not settled withi
days, the claimant may proceed against the responsible part
court or present the claim to the Fund. See id. 2713(c).___ __
some enumerated instances, claims may be presented directl
the Fund without first presenting them to the responsible pa
See id. 2713(b). "The purpose of the claim presenta ___ __
procedure is to promote settlement and avoid litigati
Johnson v. Colonial Pipeline Co., 830 F. Supp. 309, 310 (E.D._______ _____________________
1993). In contrast to the OPA's claims procedure, Rule F fo
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all claimants into litigation against the vessel owner.
claimant fails to appear in the limitation action within
monition period, he or she is enjoined from raising any cla
See Rule F(3). In view of these inconsistencies, we conc ___
that Rule F concursus even if independent of the Limitation
is inapplicable to OPA claims.
III. CONCLUSION III. CONCLUSION
For the reasons stated in this opinion, the dist
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court's order is affirmed. affirmed. ________
Costs to be assessed against appellants.
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